Meanwhile, the NARs chief economist Lawrence Yun indicated that while 2013 is ending on a soft note, the year was positive overall and that the slower sales activity seen in the last few months nay just be marking a cyclical low.

"We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014 ... Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years."

The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).

Single family home sales also declined notably falling 3.8% from October dropping 0.9% below the level seen in November 2012 while the median selling price increased 9.4% above the level seen a year earlier.

Inventory of single family homes increased from October to 1.87 million units and climbed 5.6% above the level seen in November 2012 which, along with the sales pace, resulted in a monthly supply of 5.2 months.

The following charts (click for full-screen dynamic version) shows national existing single family home sales, median home prices, inventory and months of supply since 2005.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 1.37 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 2.95 million people that are currently counted as receiving traditional continued unemployment benefits, there are 4.33 million people on state and federal unemployment rolls.

Wednesday, December 18, 2013

Today’s New Residential Construction Report showed a decline to total permit activity while indicating notable improvement in start activity with starts jumping 22.7% from October.

Single family housing permits, the most leading of indicators, increased 2.1% from October to 634K single family units (SAAR), and increased 10.5% above the level seen in November 2012 but still remained well below levels seen at the peak in September 2005.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) declined 1 basis point to 4.49% since last week while the purchase application volume declined 6% and the refinance application volume declined 4% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

It's important to note that while the last few months results have suggested a pullback of sorts for home builder activity, the latest trend has been very strong and consistent with the overall recovery seen in the nation's housing markets.

Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 11 basis points to 4.50% since last week while the purchase application volume increased 1% and the refinance application volume increased 2% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

Tuesday, December 10, 2013

The latest release of the University of Hong Kong's Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in September, the price of residential properties declined 1.40% since August but rose 12.11% above the level seen in September 2012.

With the prior late-90s era peak having been bested handily by the latest price run up, it will be interesting to see how long this period of house price inflation can run.

The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market.

Monday, December 09, 2013

As a logical consequence of the prolonged economic downturn, participation in the federal food stamp program is continuing to rise.

The latest data released by the Department of Agriculture indicated that in September, a whopping 359,389 individual recipients were removed from the food stamps program with the current total declining 0.85% on a year-over-year basis, the first annual decline seen since early 2007.

Individuals receiving food stamp benefits declined to 47.30 million which, as a ratio of the overall civilian non-institutional population now stands at a whopping 19.21% of the population.

Households receiving food stamps benefits declined by 94,170 to 22.99 million households with the current total rising 0.11% above the level seen a year earlier

Total nominal benefit cost declined 1.63% on a year-over-year basis to $6.30 billion for the month.

Today's employment situation report showed that conditions for the long term unemployed worsened in November while remaining distressed by historic standards.

Workers unemployed 27 weeks or more increased to 4.066 million or 37.3% of all unemployed workers while the median term of unemployment increased to 17.0 weeks and the average stay on unemployment increased to 37.2 weeks.

Looking at the charts below (click for super interactive versions) you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.

Today's Employment Situation report showed that in November “total unemployment” including all marginally attached workers declined to 13.2% while the traditionally reported unemployment rate dropped to 7.0%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.

Wednesday, December 04, 2013

Today, the U.S. Census Department released its monthly New Residential Home Sales Report for October showing a notable increase with sales climbing a whopping 25.4% from September and rising 21.6% above the level seen in October 2012 remaining at an historically low level of 444K SAAR units.

It's important to note that today's results were likely skewed by the recent government shutdown with additional months results required to determine if today's jump is lasting or just some noise in the data.

The monthly supply decreased to 4.9 months while the median selling price declined 0.57% and the average selling price increased 12.72% from the year ago level.

The following chart show the extent of sales decline to date (click for full-larger version).

Today, private staffing and business services firm ADP released the latest installment of their National Employment Report indicating that the situation for private employment in the U.S. improved in November as private employers added 215,000 jobs in the month bringing the total employment level 1.86% above the level seen in November 2012.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 7 basis points to 4.39% since last week while the purchase application volume declined 4% and the refinance application volume declined 18% over the same period.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes (click for larger dynamic full-screen version).

On a month-to-month basis, total residential spending slumped 0.60% from September but still climbing 17.80% above the level seen in October 2012 remaining well below the peak level seen in 2006.

Single family construction spending declined 0.60% from September rising 17.80% since October 2012 remaining well below it's peak level reached in 2006.

Non-residential construction spending declined 0.50% from September falling 3.40% below the level seen in October 2012 and remaining a well below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.